Hong Kong listed company CNOOC Limited announced Tuesday night that it has withdrawn its offer for Unocal.

CNOOC said the company has given active consideration to further improving the terms of its offer, and would have done so but for the political environment in the United States.

"The unprecedented political opposition that followed the announcement of its proposed transaction, attempting to replace or amend the CFIUS (Committee on Foreign Investment in the United States) process that has been successfully in operation for decades, was regrettable and unjustified," said CNOOC in a press release.

"This is especially the case in light of CNOOC's purely commercial objectives and the extensive commitments that CNOOC was prepared to make to address any legitimate concerns US regulators may have had regarding our acquisition," it added.

"This political environment has made it very difficult for us to accurately assess our chance of success, creating a level of uncertainty that presents an unacceptable risk to our ability to secure this transaction. Accordingly we are reluctantly abandoning our higher offer to the clear disadvantage of Unocal shareholders and employees," said CNOOC.

CNOOC said its fully financed offer to acquire all of Unocal's outstanding shares for cash at a price of 18.5 billion US dollars represents a premium of approximately 1 billion US dollars above Chevron's current competing bid and clearly superior value for Unocal shareholders.

"We proposed and agreed to a variety of measures to provide further comfort to Unocal's shareholders. In addition, recognizing that the transaction would be reviewed by CFIUS, pursuant to the United States Exon-Florio Act, CNOOC initiated a voluntary filing with CFIUS, and proactively committed to take actions with respect to Unocal's US assets as necessary to satisfy CFIUS findings," CNOOC said.

CNOOC said the company will maintain a disciplined and focused approach to evaluation of opportunities to grow shareholder value and will continue to work closely with companies and countries around the world, and look forward to continuing its strategy and business plan and to growing business for shareholders.

Source: Xinhua